College Costs Have Tripled Since 1980, and are Going Higher, Even as Wages for the Middle Class Have Stagnated

"Increases in financial aid in recent years have enabled colleges and universities blithely to raise tuition, confident that Federal loan subsidies would help cushion the increase," then-Secretary of Education William J. Bennett said in 1987. The "Bennett hypothesis" -- the theory that as long as the government ensures the bills will get paid, colleges will raise tuition -- makes sense, especially in light of Washington's guarantee of an affordable college education for all who want one. - There a Connection Between Federal Education Aid and the Inflation Rate in Higher Education, A New World Order Out of Chaos, January 10, 2011

Sad Chart of the Day: College Tuition v. Median Wages

June 15, 2011

The Lookout - CNN Money has a chart, above, showing the stark rise in average college costs at four-year public universities compared to wages since 1988.

The gap is even more steep if we go back a few more years--college costs have nearly tripled since 1980, even as wages for the middle class have stagnated.

The article accompanying the chart concludes that college is now out of reach for many middle class families, as federal aid hasn't kept pace with the ballooning costs. Financial assistance from federal and state sources, and colleges and universities themselves, is up 140 percent since 1991, according to a report by the National Center for Public Policy and Higher Education. But students are still taking out more loans to make up the difference.

Economists told The Lookout that the college affordability crisis is primarily affecting those in the bottom 20 percent of American's income distribution. As society's income distribution has become radically more unequal, the economic value of a college degree has gone up, allowing both public and private colleges to hike prices.

A recent Pew study found that 60 percent of Americans don't think colleges are providing their students with a good value, and 75 percent say college is financially out of reach for most people.

University of Washington to Hike Tuition Following Steep Budget Cuts

Ohio State University researchers surveyed more than 3,000 adults aged 18 to 34 for the study, which is published in Social Science Research. Their study found that the more debt from college loans and credit cards individuals had in their name, the more control they felt over their lives. There is, however, a catch: People over the age of 28 started to show signs of stress and worry about their debt. The downshift in debtors' moods stems from the ongoing growth of their debt obligations over time--though it is of course also true that adults have a general propensity to worry more as they age. - The more debt college students have, the higher their self esteem, The Lookout, June 16, 2011

June 16, 2011

The Lookout - Washington Gov. Chris Gregoire approved huge budget cuts today that will hike tuition at the state's premier public university by 16 percent, the Associated Press reports. Tuition at the University of Washington will cost twice as much when Gregoire leaves office than it did in 2005.

A report on Stateline.org explains that higher education budgets are also on the cutting board across the country, after facing years of smaller cuts since the recession began. Nevada is cutting public higher education funding by 15 percent, and Arizona state budget cuts have resulted in a 20 percent tuition increase
at Arizona State University.

In Texas, college tuition has risen by more than 70 percent since it was deregulated during a budget crisis in 2003. Those increases have prompted Gov. Rick Perry to ask college administrators to figure out a way to provide a college education--including books--for $10,000.

Higher education lobbyist Terry Hartle told The Lookout public colleges are the first to get hit in a budget crunch because college students "look very much like paying customers," and it's more politically palatable to cut higher ed funding that K-12 spending. In-state tuition has jumped 7.9 percent just this year, according to a recent study, and the average college student's debt is now a record $23,000. Pennsylvania State University has the most expensive in-state tuition and fees of any public college, at more than $15,000 per year, according to the U.S. News and Report.

According to data from the National Association of Budget Officers, 18 states cut K-12 and higher education spending in fiscal 2011, by $1.8 billion and $1.2 billion respectively. But proposed cuts for the next fiscal year are much steeper: They total $2.5 billion for K-12 schools and more than $5 billion for higher education.